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MADRID (Reuters) - The chief executive of Iberia has resigned following months of strikes at the loss-making Spanish airline, parent company International Airlines Group (IAG) (ICAG.L) said on Wednesday.

Rafael Sanchez-Lozano and IAG decided "by mutual agreement" that he would give up his duties as Iberia chief executive and as an IAG board member immediately, the company said, without giving the reason.

Sanchez-Lozano, who had led the airline since 2009, will be replaced by Luis Gallego, CEO of budget carrier Iberia Express, a major source of tension with Iberia workers.

Iberia staff reached an agreement with management earlier this month to end strike action over job and salary cuts after a government-appointed mediator stepped in to end the gridlock.

Workers staged two five-day walk-outs in February and March and threatened further action if their demands were not met. Iberia agreed to shed 3,141 workers instead of 3,807 and softened pay cuts to reach a deal.

"(Sanchez-Lozano) has led the airline through a very difficult period in the midst of a deep recession and has completed the first important step towards returning the airline to profitability," IAG Chief Executive Willie Walsh said in the statement.

IAG, home to Iberia and profitable British Airways, said the company lost 3 million euros (£2.55 million) every day that workers at the Spanish airline were on strike. The company posted an operating loss of 613 million euros for 2012.